The Putin Olympics

Who would hold the Winter Olympics in a summer resort? Vladimir Putin is who. In the triumph of what can only be called a preposterous idea, three short weeks from now the Russian president will draw the world’s attention to a grand legacy project of his own fantastic design. Nearly seven years ago, Putin personally pitched the International Olympic Committee to choose Sochi for these winter games. Sochi? Picture the Jersey Shore in the 1950s—plus palm trees and minus, until recently, the widespread luxury of indoor plumbing in the huts that locals rent to beachgoers. The place sits on the same latitude as the French Riviera, and until Putin fell in love with it, was best known for the packs of Soviets who used to sun themselves on the rocky shore of the Black Sea.

Sochi today is Putin’s personal pride, a project of such colossal authoritarian branding that it’s hard to think of a more recent example of a political leader so closely involved in such a grandiose building spree. For these past seven feverish years, the city has been Europe’s largest construction site—only recently declared by the Kremlin ready to host the Games that start on Feb. 7. Putin himself is in Sochi now, where he is personally reviewing final preparations, granting interviews and generally taking a tsar-like approach to inspecting what his billions have bought. And billions it has been: The overall price tag for the Games has now reached somewhere between $50 billion and $55 billion, a figure that makes this not only the most expensive Olympics in history, but also pricier than all previous Winter Olympiads put together.

Putin’s Olympics are first and foremost political, a chance to project the image of the new, confident and rich Russia, one “risen off its knees” by the neo-authoritarian administration of the last 14 years. Alexei Makarkin, a leading Russian political sociologist, called the Olympiad the “most prestigious undertaking of Russia’s present regime.”

No effort has been too strenuous, no weather too warm, no terrorist threat too immediate and, of course, no amount of state treasure too large to ensure success. Whether Putin has planned it or not, the Sochi Olympiad looks as if it has the perfect timing to be the crescendo of a string of international successes he has enjoyed over the past year, when he managed both to prevent a U.S. military intervention in Syria and to steal the title of “world’s most powerful man” (at least, the Forbes magazine version) from Barack Obama. (Asked whether it was his personal reputation at stake in the Games, Putin told ABC News’s George Stephanopoulos, “No, no. I want it to be the nation’s success… not my personal ambition.”)

And yet Putin’s expectations for a triumph may run into a stone wall of reality. Many are bracing for a disruption, even disaster. The Sochi games will be the first Winter Olympiad held in the subtropics and not unrelatedly, the gap between what has been needed by way of infrastructure and what was already available had never been as deep and wide. It is also beset with protest; it’s the first Olympics to be held in an area of mass expulsion of an indigenous people, whose descendants accuse Russia of genocide. Perhaps most hazardously of all, it is the first (and almost certainly the last) Olympiad to be held within a few hundred miles of a low-intensity but deadly jihad. Indeed, this is without a doubt the most precarious Olympiad ever attempted, for reasons of geography, climate and infrastructure—but also for the way the regime has chosen to address these challenges. Will Putin’s triumphalist narrative prevail? Maybe.

In putting his Winter Olympiad near a beach resort, Putin seems to be possessed of what might be called the Peter the Great complex: emulating the tsar who built his capital, from scratch, on a swamp. His affection for the area is connected perhaps less to the beach than to the nearby ski resort in the craggy Caucasus Mountains, Krasnaya Polyana, which is his favorite. And in the effort to situate the Games there, the avid skier has loomed large from the very start. In July 2007, Putin flew to Guatemala to lobby the IOC, which he addressed first in English, a language he almost never speaks in public. He told the IOC members about the ancient Greeks who once lived around Sochi and how, when skiing in the area, he could see the rock, to which, according to an ancient Greek legend, the gods chained Prometheus as punishment for giving men fire. What better place to connect the Promethean flame with the Olympic torch than Sochi? To impress the judges with a final flourish, Putin ended his presentation in French, which no one knew he spoke. The committee’s vote went for Sochi 51 to 47 over the South Korean city of Pyeongchang. On hearing the news, a large Russian delegation erupted in ovation and began to throw snow in the air. Putin sat, beaming, in the front row.

Ever since, Putin’s hand has never left the rudder. He put one of his closest and most trusted aides, Dmitry Kozak, in charge of Olympic preparations, creating a deputy prime minister position specifically for the purpose. Kozak, considered a skillful manager, had been previously dispatched by Putin to be a kind of super-governor in Russia’s most violent Southern federal district where the Islamic insurgency that now threatens the Games began after the “pacification” of Chechnya in the early 2000s. In another early appointment, Putin picked the head of the FSB’s counterintelligence department, General Oleg Syromolotov, to lead security efforts. In the KGB, which Putin joined in his early 20s, and in its successor agency, the FSB, which Putin once headed, counterintelligence officers have long been considered the elite—the most competent, most loyal and least corrupt. Then, when the first head of Olympstroy, the government agency working under Kozak to produce the Games, reportedly cited huge cost overruns only 14 months into his tenure, he was fired. Putin then personally hired and terminated two successors.

His frequent visits to Sochi became fodder for the nightly news. During one such inspection last February, Putin berated Kozak on prime-time television for the delay in the completion of the ski jump. The president then proceeded, on the air, to effectively fire a vice chairman of the national Olympic Committee responsible for the construction. (The disgraced official quickly fled Russia, ostensibly for medical treatment in Germany, and never came back.)

Of course, there are some things that Putin’s scrutiny may not be able to fix. Sochi is literally the warmest place in Russia and features daily high temperatures in February that occasionally peak at 62 degrees Fahrenheit. It will be colder in the mountains, where the open-air, snow-requiring events are hosted—but not by much and certainly not consistently enough to count on. Russian wits have begun calling the Putin Games “the first Spring Olympics in history.”

Last February, frustrated skiers and snowboarders were seen coming down from the mountains wearing raincoats over their parkas. And last year’s World Cup free-ski and snowboard competitions, which were to be a kind of test-run for the Olympic venue, had to be canceled “due to lack of snow and continuous warm and rainy weather conditions.” To address a no-snow crisis of the kind that struck the Vancouver Games in 2010, the organizers claim they have already stored more than 1 million cubic feet of snow and promised to accumulate an additional 15 million cubic feet before the Games began.

We don’t know how much these alleged mountains of snow will cost, but no sticker is likely to shock. When Russian officials made their winning bid to host the Games, they estimated spending $10 billion. (The three most recent winter Olympiads in Salt Lake City, Turin and Vancouver cost, respectively, $1.2 billion, $3.6 billion and $7 billion.) Within a year, the projection had risen to $13 billion. By the time the figure hit $30 billion, in 2010, Putin (then prime minister) signed a decree excluding the Sochi Games from the list of “state programs,” taking them out of the purview of the Ministry of Finance and the Ministry of Economic Development and effectively putting them under his direct control. A year later, President Dmitri Medvedev estimated that expenditures would grow to $43 billion. By early 2013, Kozak cited $51 billion. Estimates by critics of the Putin regime now put the figure $4 billion higher still.

As is typical in Russia today, the corruption “overhead” (mostly in the form of kickbacks, or otkaty) is a major cost inflator. In at least one case, the owner of a construction company went public, complaining in June 2010 to then-president Medvedev about being harassed by an official after the businessman had already kicked back the agreed-on 12 percent—$50 million—of the contract’s cost to a government official. (Perhaps he ought to have been thankful for the low kickback rate: The current Russian otkaty range is 20 to 50 percent or even higher).

The 28-mile combined highway and railroad link from the coastal cluster of venues in Sochi to the Krasnaya Polyana Olympic village in the mountains will end up costing at least $8.2 billion. According to the Russian edition of Esquire, for that sum the highway portion could have been paved with mink furs. (The magazine also estimated that another new road in Sochi could have been paved with nine inches of foie gras.) Russia’s Audit Chamber, the parliament’s watchdog, has estimated that state-run companies misspent more than $500 million in Sochi. The government’s critics estimate the stolen and wasted funds at around $30 billion.

Splendor at whatever cost is certainly nothing new for the Kremlin’s leader. A few years ago, satellite photos posted to a Russian whistleblower website showed a sprawling, Italian-style palace on the Black Sea, reportedly built for the president. The complex included a fitness spa, a hideaway “tea house,” a concert amphitheater and a pad for three helicopters. Cost estimates suggested more than $1 billion had been spent on the property. (Putin always denied ownership, and, perhaps because of the negative publicity, the palace is now said to be for sale.)

In addition to tapping the Kremlin’s habitual cash cow, the world’s largest natural gas company, Gazprom, the tab for all of this was supposed to be shared with some of Russia’s top billionaire oligarchs and their companies, such as metal tycoons Vladimir Potanin (the world’s nickel king) and Oleg Deripaska (his aluminum counterpart). The model was meant to evoke a kind noblesse oblige imposed by the modern-day tsar on the richest boyars, yet the wealthy investors have publicly and repeatedly complained about their financial burden and the dwindling prospects of ever earning their investments back. Apparently their whining has reached the right quarters and, in the end, reportedly, 90 percent of these “private” investments have been covered by loans from the state-owned bank Vnesheconombank.

Getting Sochi ready for its moment in the international spotlight has been costly in more ways than one—and certainly changed the place forever. Unlike the more urban-bound Summer Olympics, Winter Olympiads tend to be off the beaten path, requiring heavy infrastructural investments. But nothing has approached the scale of what was needed in Sochi.

After visiting in the spring of 2008, Jean-Claude Killy, the former champion skier and the head of IOC’s coordinating committee, said that the undertaking represented “probably the most challenging Olympics ever as far as what has to be built to deliver these Olympic Games.” Taking another look a year later, Killy was even more emphatic, calling Sochi “the most difficult task of all times,” and adding that “we can’t afford to lose, another day, another hour, even another second.”

In addition to seven “palaces” for indoor events and two Olympic parks, the project also required 40 new and refurbished hotels, 220 miles of new or reconstructed roads, 125 miles of rail, a dozen tunnels stretching 16 miles and cutting through the mountains, 70 bridges, a new seaport and a hospital. Of course, gas and sewer lines had to be laid down too—and all of the needed electricity be supplied by a new power plant.

There are already questions about the reliability of the construction. Organizers employed some 16,000 migrant workers in the Sochi sites; most of them came from the former Soviet Central Asian republics of Kyrgyzstan, Tajikistan and Uzbekistan, though others were brought in from Serbia, Turkey and Ukraine. The average pay was the equivalent of $1.80 to $2.60 an hour, or around $605 a month. Workers reported dismal conditions and 12-hour workdays—many also say they were not paid regularly. In desperation, one man reportedly sewed his mouth shut to protest nonpayment for himself and 30 of his fellow workers.

Construction of this magnitude—and on this deadline—also subjected the locals to all manner of inconvenience and abuse. This regime, after all, takes what it wants: In one example from a decade ago, it seized the oil giant Yukos and jailed its owner and Russia’s richest man, Mikhail Khodorkovsky, in a bid to ensure political dominance. (Putin just released Khodorkovsky last month in what Russians took as a pre-Olympic goodwill gesture.) Last year, citizens in central Sochi went for months without running water and endured power outages almost daily. Dozens, perhaps hundreds, of properties have been condemned and demolished, and at least 2,000 families were evicted. In the rush to complete construction, the demolition crews are said to have sometimes torn down houses without bothering to check if there were people inside. The compensation for lost buildings was calculated at rates hundred times lower than the market value—and some residents claim that even that money was pocketed by the authorities. A few hundred hovels in Sochi stood little chance in the face of determined ambition.

Relocation into government- provided high rises was cold comfort to those who lost their main source of livelihood: earnings from renting rooms in their houses to summer beachgoers. And unlike some other Olympic sites, Sochi is very unlikely to benefit in the long term from the new winter-sports infrastructure: Because of location, climate and security concerns, it will instead return to serving as beach town for lower middle class Russians—with billions of dollars wasted. That is, except for the mess. In the rush to finish the construction, crews have been dumping waste in the Mzymta River and the nearby Akhshyr crater. Anticipating such problems, Sochi residents have protested from the very beginning. Calling themselves “hostages of the Olympics,” a group of residents last year demonstrated against the organizers, who they said were “destroying” their city. At least one desperate resident painted an “SOS” message on the roof of his house. Of course, security officials will be lucky if the rest of the protests they’re bracing for end up being so civil.

The Olympics have faced corruption before. In one recent example, a Chinese official who oversaw construction at the Beijing Games in 2008 was sentenced to death after he was reportedly bought off by developers with mistresses and opulent homes. And the Games have endured violence, including the murder of 11 Israeli athletes at the 1972 Munich Games and the bomb blast at the 1996 Atlanta Games that killed 2 and injured more than 100. But in terms of the threats it faces, Sochi is made unique by both local passions over recent and historic injustices, and by the Russian regime’s ham-handedness in suppressing dissent.

In addition to human rights defenders, environmental activists, and disgruntled locals, two groups are thought especially likely to precipitate disruption. Lesbian, gay, bisexual and transgender activists intend to draw attention to the 2013 Russian law that bans “propaganda of homosexuality to children.” The controversial piece of legislation, signed by Putin, defines “propaganda” so broadly that it effectively criminalizes the subject of homosexuality in mass media, online or at public events, such as gay pride parades. Russian LGBT activists plan to defy the law and hold a pride parade on Feb. 7, the opening day of the Games. (Putin signed and then, earlier this month, rescinded a ban on protests at the Olympics altogether. Still, demonstrators will have to seek police permission and confine their protest to a prescribed area, miles away from the Games.)

To encourage more protests at the Games, the LGBT groups Athlete Ally and All Out have launched the Principle Six Campaign, which is named after the article in the Olympics Charter that bans discrimination. As of December, three dozen U.S. Olympians had declared their support. (Putin recently vowed that the Games would operate free of discrimination and that laws about homosexuality are born merely out of concern for kids. “You can feel relaxed,” he said, “but leave children alone please.”)

Protests could also come from Circassians, a North Caucasian people who claim Sochi as their historic capital. During the final phase of Russia’s conquest of the Muslim North Caucasus in 1864, 1.5 million Circassians were deported to Turkey. With the Olympiad held on the 150th anniversary of this expulsion—which they consider a genocide responsible for the deaths of hundreds of thousands—Circassian activists in Turkey, Syria, Jordan and the United States have called for Russia’s recognition of and apology for the 1864 expulsion and for the boycott of the Games. Absent that, activists are demanding the same leading role for the representatives of the Circassian people, 700,000 of whom are living in the North Caucasus, during the opening ceremonies, as was accorded to indigenous people during the Vancouver Olympiad—a demand that Moscow has rejected.

Of course, all fears of protests are dwarfed by the threat of terrorist violence by Islamic militants seeking to detach the North Caucasus from Russia and establish a fundamentalist caliphate there. According to Russian experts, 98 percent of all terrorist acts in Russia occur in the North Caucasus, in the immediate proximity of Sochi. Between January and September 2013, the jihad left 375 people dead and 343 injured. Among those killed were more than 100 police and security troops and 200 terrorists.

On Oct. 21 of last year, a female suicide bomber from Dagestan killed seven people and injured 50 in the southeast Russian city of Volgograd. Two months later, on Dec. 29 and 30 in the same city, suicide bombers killed nearly three dozen people in less than 48 hours. In Sochi itself, two bombs were detonated in July and August 2008, killing four people and injuring more than 40. Two years later, there was an explosion—less than 10 miles from the city—on the main railway that runs through Sochi. In May 2012, Russia’s National Anti-Terrorism Committee announced confiscation of arms, ammunition, self-made bombs, land mines, mortars and grenade launchers in the breakaway Republic of Abkhazia (formerly part of Georgia), a mere 24 miles away from Sochi. The authorities claimed that the cache belonged to the group “Abkhaz Jamaat,” which was planning attacks during the Olympiad.

Last summer, Doku Umarov, the self-proclaimed leader of the North Caucasian jihad and self-declared emir of the Caucasus Emirate, posted a YouTube video in which he called on fellow jihadists to “do their utmost to derail” the Olympiad. He called the Games “satanic dances on the bones of many many Muslims killed … and buried on our lands extending to the Black Sea,” and declared it their “obligation to use all means to prevent this.” (Umarov is rumored to have been killed this week, and not for the first time.)

Russia’s position in the Syrian civil war only exacerbates the outrage of jihadists who revile Syrian President Bashar Assad and are angered over Putin’s unwavering support of Assad’s regime. On July 30, a Russian-speaking Syrian jihadi warlord, Salakhuddin, posted a YouTube clip in which he called on volunteers from the North Caucasus to “prepare for the so-called Olympics Games in Sochi.” “For such a jihad,” he went on, “two people is enough.” According to Sergey Goncharov, a former deputy commander of Russia’s elite special forces Alpha unit, “If they get reinforcement from Syria, our security services will be hard put to prevent them from ruining the Olympics.” This past September, Putin admitted that the fighters returning from Syria were “a very real threat.”

In response to all of this, the Russian authorities have committed mammoth resources to minimize the danger. Building on the security experience of other Games, especially the 2012 London Summer Olympics, the Kremlin plans to deploy between 37,000 and 42,000 police, as well as at least 10,000 Ministry of Internal Affairs troops and an unspecified numbers of elite paratroopers and FSB agents. High-speed patrol boats and sonars to detect submarines will be guarding Sochi from the sea. A special detachment of veterans of the two Chechen wars and antiterrorist operations in the North Caucasus will patrol the wooded Caucasus Mountains, and an unknown number of FSB border troops will concentrate on routes that could to be used by fighters coming from Afghanistan, Pakistan and Syria.

The authorities will operate 5,500 Israeli-made surveillance cameras. Robotic vehicles will be searching for explosives and, for the first time in Olympic history, small spy drones will hover over key venues. The FBI announced that dozens of agents will be coordinating with the Russian authorities in Sochi, with additional personnel deployed in Moscow during the Games.

But the key distinguishing characteristic of the Sochi security plan figures to be the universality and depth of cyberspying, which puts everyone in Sochi under what some Russian analysts call an electronic dome—a cyberspace transparent to and penetrated by the authorities. On Nov. 8, 2013, Medvedev signed a decree authorizing the government to collect data on telephone calls and Internet contacts made by the Games’ organizers, athletes and foreign journalists. (The information collected will be stored for three years.)

So extraordinary are these measures—and so alarming to the U.S. State Department—that American officials have distributed a pamphlet of warning to anyone traveling to the Games, admonishing business travelers in particular to be aware that “trade secrets, negotiating positions, and other sensitive information may be taken and shared with competitors, counterparts, and/or Russian regulatory and legal entities.” The State Department literature also advises precautions such as removing cell phone batteries when not in use.

While the measures are unprecedented in the annals of Olympic security, the approach is perfectly consistent with a regime that’s taken a hard line toward terror threats since it came to power vowing to end the Chechen insurgency. The Russian protocol will radically widen the application of Russia’s premier tool of secret surveillance: the System of Operational and Investigative Measures (SORM). Since 2010, Russian telecommunications and Internet providers have been required to install the latest version of the SORM equipment, at their own expense. Russian experts have concluded that the “new and improved” SORM is capable of intercepting not just emails but “absolutely all information” that a user transmits via social networks, chats and Skype.

While organizers are providing free Wi-Fi faster than any past Olympiad, the providers of the wireless service have modified their equipment to make it easier for the FSB to examine the Internet content. Internet users who hope to protect their communications by using non-Russian sites and relying on the encryption provided by Google, Facebook and other major Internet platforms are likely to be disappointed.

Those who bought tickets to the Games have already had a preview of these measures. In addition to tickets, a “Fan Passport,” bearing an individual’s name and photo, will be required to enter the venues. To take the photograph, one needs to log on to a site provided by the Russian authorities, which activates the camera on the user’s computer. When doing so, a fan is warned that he or she is permitting the site to record activity on the computer’s microphone and camera.

The Sochi Games so far have epitomized the seamy underbelly of the Kremlin regime: corruption, incompetence, profligacy, lack of public input, secret police as the country’s most powerful institution, the stifling of debate by de facto censorship and no effective limits to the leader’s fiat.

Three and a half years ago, another key developing nation held a giant sports event—and, as in Sochi, the specter of a fiasco loomed large. Until the last minute, the 2010 Commonwealth Games in New Delhi appeared to be headed for national humiliation amid collapsing bridges and an athlete’s village called “uninhabitable.” There was waste, incompetence and flagrant and widely publicized corruption and although India managed to finish construction by the opening date, the hit suffered to India’s self-image was reported to be “traumatic.” The disappointment resulted in an anticorruption backlash that has since become a major and enduring factor in Indian politics: A new national anticorruption party has sprung into existence. This past December, the ruling Congress party was defeated by the opposition in assembly elections in four of the country’s key states, while AAP has won more than two dozen seats in the Delhi state assembly.

The Commonwealth Games cost, at most, $6 billion. On Sochi, the Kremlin could end up spending nine times that—more than twice as much as it spent on education for the entire nation in 2013 and almost 80 percent of health care expenditures. This in a country where the average monthly pension of $300 is among the lowest in Europe, the length and quality of roads ranks 136th of the 144 countries (below Bosnia and Herzegovina and just above Ukraine and Gabon) and the life expectancy for men is on par with that in Myanmar,

As early as July 2008, the independent Committee for Civic Control warned that if preparation for the Olympiad proved inadequate and the money “torn out from the budget to the detriment of the social and economic situation” was wasted, the country would suffer “humiliation” that would be felt for decades. Yes, the Russian people want to feel proud of their country, an editorial in a leading independent newspaper, Vedomosti, claimed last year, but “the preparation for the Games is proceeding with our money but without our input,” and “what has been built is bound to break.”

In a 2013 national survey, almost two-thirds of Russians felt that Olympic funds were spent with little to no effect or “simply stolen.” An opposition columnist declared that the people would not forget how authorities evicted people from their homes, made money on the construction and “killed Sochi’s unique ecological system.”

Designed to legitimize the neoauthoritarian regime, could the Sochi Olympics instead become Russia’s moment of truth, prompting national soul-searching and spurring the movement for democratization? For Putin, the consequence of a failure could be more devastating still. With the oil-dependent national economy slowing down to a crawl and the specter of stagflation haunting a country used to 7 to 10 percent growth in real incomes in Putin’s first two terms, the Russians’ trust in him, which is the backbone of the regime’s legitimacy, has fallen to 30 percent (half of what it was in 2008), and support for his policies has dropped to its lowest point in 12 years. In the high-risk/high yield venture that is the Sochi Olympics, Putin may triumph despite the handicaps he’s facing. But, like with every once-popular autocrat, the Russian president’s hubris may also be tempting the gods in a style befitting the very Greeks who gave us the Games.

Leon Aron is resident scholar and director of Russian Studies at the American Enterprise Institute and author, most recently, of Roads to the Temple: Truth, Memory, Ideas and Ideals in the Making of the Russian Revolution, 1987-1991.